1. “THE Godfather of Negotiation Planning” ~ Intel Corp
Omid Ghamami
PURCHASING AND NEGOTIATIONS EXPERT
Pain Point # 7 – DEALING WITH THE LEGAL DEPARTMENT AND STICKY CONTRACTS

2. 1) SLA
2) Prevention
3) Expectations
5) Remedies
SPER Execution Model

3. SPER Execution Model
SLA with legal department on standard acceptable modifications
Prevent modifications with RFX language
Expectations: Protect with customized language that sets expectations and measurements
Remedies for breach of performance expectations

4. Step 1 – SLA With Legal Dept
SLA = Service Level Agreement
An agreement between the parties that sets expectations for 2-way customer service levels
The key is to focus on what the legal dept needs first
Meet with them and indicate you’d like to put an SLA in place to make things smoother for both groups
Do not position this as a way to “up the ante”
Do have it come across as a way to ensure the partnership works best for both parties

5. SLA With the Legal Dept, Cont.
Ask them what frustrates them with purchasing
Ask them what could be done differently by purchasing to make their job easier
Try to quantify these things, e.g.:
3 day advance notice on contract reviews
No more than 2 “hot reviews” per month

6. SLA With the Legal Dept, Cont.
Now shift gears to the things you need
Allow for purchasing to negotiate Ts and Cs at will
Only require legal involvement on an exception basis
SLA should state that legal will always be involved if issues with any of the following:
limitation of liability, confidentiality/publicity, indemnification, intellectual property, disclaimer of UCC implied warranties, supplier desire to have Louisiana as governing law, and alternative dispute resolution (ADR)
Standard contract language on any of the above does not require legal involvement
Establish legal turn-around-time on contract reviews
Should be shorter than current, since they will see fewer contracts as a result of this SLA

7. Step 2 - Prevent modifications with RFX language
Send a copy of your standard Ts and Cs with your RFX documentation
In your RFX Documentation, include a score card that indicates how their response will be graded
Make “# of requested changes to standard contract” a major category; ex below
Bid Response Category
Decision Weighting Factor
Price
30%
Warranty
27%
Lead-time
18%
# of requested changes to purchasing’s standard contract template
25%

8. Step 3 – Execute Customized Contract Language that Sets Expectations
The contract doesn’t “know” what you are buying…
You must customize the contract to
SET expectations and PREVENT excursions
You must do a comprehensive “what could go wrong” analysis with your customer, and any other key stakeholders
Reverse engineer these issues into a SOW component, Spec component, or performance criteria and include in contract
If objective, set measurement
If subjective, state in contract that “purchasing shall have exclusive right to determine if this deliverable was met”

9. Step 4 - Remedies for Breach of Performance Expectations
If a particular contract deliverable is important to you, add language that protects you
“Failure to perform to this contract deliverable to Buyer’s satisfaction shall constitute a material breach of contract”
PRE-DEFINE remedies in the contract so you get out of “Fire-Fighting Mode” when things go wrong
Liquidated damages in the form of price reductions or cost of cover
Do not assess penalties, only the courts can impose punitive damages
Cure period and time to closure
Specify who will pay for incidental expenses
Be very specific about the who/what/where/when/why/how of contract breach remedies
Fire fighting will become a thing of the past!

10. Call to Action
SLA with legal department on standard acceptable modifications
Prevent modifications with RFX language
Expectations: Protect with customized language that sets expectations and measurements
Remedies for breach of performance expectations

11. “THE Godfather of Negotiation Planning” ~ Intel Corp
Omid Ghamami
PURCHASING AND NEGOTIATIONS EXPERT
Thank you for watching! TCO